Sunshine Oilsands Ltd.: Private Placement of HK$ 50,000,000 of Common Shares Under the General Mandate to Able Honour Holdings Limited

HONG KONG, CHINA and CALGARY, ALBERTA–(Marketwired – Nov. 12, 2015) – The Board of Directors (the “Board“) of Sunshine Oilsands Ltd. (the “Corporation” or “Sunshine“) (HKSE:2012) is pleased to announce the following:

PRIVATE PLACEMENT OF HK$ 50,000,000 OF COMMON SHARES

(a) The Placement

On November 12, 2015 in Hong Kong (November 12, 2015 in Calgary), the Corporation entered into a subscription agreement (the “Subscription Agreement“) with Able Honour Holdings Limited (“Able Honour“) under which Able Honour agreed to subscribe for a total of 78,125,000 Class “A” Common Voting Shares of the Corporation (“Common Shares“) at a price of HK$ 0.64 per Common Share or approximately CDN$ 0.11 per Common Share at current exchange rates (the “Subscription Price“), which in the aggregate amounts to gross proceeds of HK$ 50,000,000 (approximately CDN$ 8,585,017 at current exchange rates) (the “Placement“).

The aggregate number of Common Shares to be issued to Able Honour (the “Subscriber“) represent approximately 1.90 % of the existing issued and outstanding Common Shares as at the date of this announcement and, immediately following the completion of the Placement (assuming there will be no other changes in the number of issued and outstanding Common Shares between the date of this announcement and the completion of the Placement (other than the private placement announced on November 10, 2015) including, without limitation, pursuant to the Employee and Connected Subscription as defined below), approximately 1.85% of the then enlarged total issued and outstanding Common Shares.

(b) Subscription Price

The Subscription Price represents:

(i) a discount of approximately 18.78% to the average closing price of approximately HK$0.788 per Common Share as quoted on the Hong Kong Stock Exchange for the last five trading days immediately prior to November 12, 2015 (being the last trading day immediately preceding the signing of the Subscription Agreement); and

(ii) a discount of approximately 15.79% to the closing price of HK$ 0.76 per Common Share as quoted on the Hong Kong Stock Exchange on November 12, 2015.

The aggregate gross proceeds to be raised from the Placement will be HK$ 50,000,000 (approximately CDN$ 8,585,017 at current exchange rates).

The Subscription Price was determined with reference to the prevailing market price of the Common Shares and was negotiated on an arm’s length basis between the Corporation and the Subscriber. The directors of the Corporation (the “Directors“) consider that the terms of the Placement are on normal commercial terms and are fair and reasonable based on the current market conditions and the Placement is in the interests of the Corporation and its shareholders as a whole.

(c) Conditions to Completion of the Placement

Completion of the Placement is subject to the fulfillment (or waiver) of the following conditions:
(i) the Stock Exchange of Hong Kong Limited (the “Hong Kong Stock Exchange“) approving the listing of the Common Shares to be issued pursuant to the Placement;

(ii) compliance of the Placement with the requirements under the Rules Governing the Listing of Securities on the Hong Kong Stock Exchange and the Hong Kong Code on Takeovers and Mergers (where applicable); and

(iii) the receipt of all other required regulatory approvals.

In the event that closing of the Placement does not occur by the Closing Date (as defined below), the Placement will immediately and automatically terminate, the obligations of the Corporation and the Subscriber under the Placement shall immediately cease and be null and void and the subscription monies in respect of the Placement will be returned to the Subscriber.

(d) Completion of the Placement

Completion of the Placement will take place on November 26, 2015 (or such other date as the Corporation may choose) (the “Closing Date“).

The certificates representing the Common Shares subscribed for under the Placement will bear certain legends, as required under applicable Canadian securities laws, including a legend stating that unless permitted under applicable Canadian securities legislation, the holder of the Common Shares must not trade the Common Shares before the date that is four months and a day after the Closing Date.

Completion of the Placement is subject to the satisfaction of certain conditions. As the Placement may or may not proceed, shareholders and potential investors of the Corporation are advised to exercise caution when dealing in the securities of the Corporation.

(e) General Mandate to Issue Common Shares

The Placement does not require the approval of the Corporation’s shareholders as the Common Shares under the Placement will be allotted and issued under the general mandate, which was granted to the Board at the annual general and special meeting of the Corporation held on June 24, 2015 (Hong Kong time) / June 23, 2015 (Calgary time) (the “AGM“) to issue up to 20% of its aggregate issued and outstanding share capital as at the date of the AGM until the next annual general meeting of the Corporation (the “General Mandate“). The amount of the General Mandate is 780,194,614 Common Shares. Details of the General Mandate are set out in the Corporation’s circular dated May 19, 2015.

As at the date of this announcement, other than (i) the issuance of 100,000,000 Common Shares as disclosed in the announcement dated September 21, 2015 (Hong Kong time)/ September 20, 2015 (Calgary time); and (ii) the proposed issuance of 36,912,000 Common Shares as disclosed in the announcement dated November 10, 2015 (Hong Kong time)/ November 9, 2015 (Calgary time), the Corporation has not issued, and has not proposed to issue, any Common Shares under the General Mandate. The Common Shares when issued pursuant to the Placement will be credited as fully paid and rank pari passu in all respects with the other existing Common Shares.

(f) Background of Able Honour

Able Honour, a merchant company based in Shanghai, is an existing shareholder of the Corporation and, as at the date of this announcement, holds 14,000,000 Common Shares representing approximately 0.34% of the existing issued and outstanding Common Shares. After the completion of the Placement (assuming there will be no other changes in the issued Shares between the date of this announcement and the completion (other than the private placement announced on November 10, 2015) including, without limitation, pursuant to the Employee and Connected Subscription), Able Honour will hold 2.18% of the then enlarged total issued and outstanding Common Shares.

To the best of the Directors’ knowledge, information and belief having made all reasonable enquiries, Able Honour and its respective associates (as defined under the Listing Rules) and respective ultimate beneficial owners are independent of and not connected with the Corporation and its connected persons (as defined under the Listing Rules).
An application will be made by the Corporation to the Hong Kong Stock Exchange for the listing of, and permission to deal in, the Common Shares to be issued to the Subscriber pursuant to the Placement.

(g) Reasons for the Placement and Use of Proceeds from the Placement

The Directors consider that the Placement represents an opportunity to raise capital for the Corporation at an important time for the Corporation. The gross proceeds to be raised from the Placement will be HK$ 50,000,000 (approximately CDN$ 88,585,017 at current exchange rates). Based on the estimated expenses of approximately HK$ 1,700,000 (approximately CDN$ 291,891 at current exchange rates), the net proceeds to be raised from the Placement will be approximately HK$ 48,300,000 (approximately CDN$ 8,293,126 at current exchange rates). On this basis, the net price per Common Share under the Placement is approximately HK$ 0.618.

The Corporation intends to apply the net proceeds from the Placement (i) for general working capital of the Corporation and (ii) as funds for future development of the existing business of the Corporation, including funding the development and operation costs of the West Ells project.

(h) Fund Raising Activities of the Corporation in the Past Twelve Months

The Corporation has conducted the following equity fund raising activity in the 12 months preceding the date of this announcement.

Date of announcement

Fund raising activity

Approximate net proceeds raised

Intended use of the net proceeds

Actual use of the net proceeds

June 1, 2015

Private placement of Common Shares under Specific Mandate (the “Employee and Connected Subscription“)

HK$391,612,282.50 (approximately CDN$62,958,149.66 (1),(2))

(i) for general working capital of the Corporation; and
(ii) as funds for future development of the existing business of the Corporation, including funding the development and operation costs of the West Ells project.

HK$ 83,410,658 (approximately CDN$ 14.1 million) used as intended

September 21, 2015

Private placement of Common Shares under General Mandate

HK$ 49,300,000.00
(approximately
CDN$ 8,363,161(3))

(i) for general working capital of the Corporation; and
(ii) as funds for future development of the existing business of the Corporation, including funding the development and operation costs of the West Ells project.

HK$ 49,300,000.00
(approximately
CDN$ 8,363,161(3)) used as intended

November 10, 2015(4)

Private placement of Common Shares under General Mandate

HK$ 22,554,560.00
(approximately
CDN$ 3,862,413(5))

(i) for general working capital of the Corporation; and
(ii) as funds for future development of the existing business of the Corporation, including funding the development and operation costs of the West Ells project.

Not yet completed

Notes:

(1) Based on the Bank of Canada’s nominal noon exchange rate (as at May 29, 2015) of CDN$1.00 = HK$6.2202.

(2) The issuance of 111,214,210 Common Shares with proceeds of HK$83,410,658 closed on August 21, 2015 and the issuance of the remaining 413,520,000 Common Shares with proceeds of HK$310,140,000 is expected to close no later than December 2, 2015.

(3) Based on the Bank of Canada’s nominal noon exchange rate (as at September 18, 2015) of CDN$1.00 = HK$5.8949.

(4) This proposed private placement has not been completed. Please refer to the announcement dated November 10, 2015 (Hong Kong time) for further details.

(5) Based on the Bank of Canada’s nominal noon exchange rate (as at November 9, 2015) of CDN$1.00 = HK$5.8395

(i) Effects on Shareholding Structure

The existing shareholding structure of the Corporation and the effect of the Placement on the shareholding structure of the Corporation immediately following the completion of the Placement (assuming there will be no other changes in the issued Shares between the date of this announcement and the completion (other than the private placement announced on November 10, 2015) including, without limitation, pursuant to the Employee and Connected Subscription) is set out below.

As at the date
of this Announcement

Immediately after Completion
of the Placement

Name of Shareholder

Number of
Common Shares

Approx. %
of issued
Common Shares

Number of
Common Shares

Approx. %
of issued
Common Shares

Mr. Kwok Ping Sun

729,859,500

17.74

729,859,500

17.25

China Life Insurance (Group) Company(1)

314,822,600

7.65

314,822,600

7.44

Mr. Hok Ming Tseung

295,893,656

7.19

295,893,656

6.99

Sinopec Century Bright Capital Investment Limited(2)

239,197,500

5.81

239,197,500

5.65

Central Huijin Investment Ltd(3)

206,611,560

5.02

206,611,560

4.88

Mr. Junhua Huang

19,250,000

0.47

56,162,000(4)

1.33

Able Honour Holdings Limited

14,000,000

0.34

92,125,000

2.18

Other Shareholders

2,295,592,288

55.78

2,295,592,288

54.27

Total

4,115,227,104

100.00

4,230,264,104

100.00

Notes:

(1) China Life Insurance (Group) Company owns the entire issued share capital of China Life Insurance (Overseas) Company Limited, which in turn owns 314,822,600 Common Shares. Accordingly, China Life Insurance (Group) Company is deemed to be interested in 314,822,600 Common Shares held by China Life Insurance (Overseas) Company Limited.

(3) Central Huijin Investment Ltd owns approximately 67.72% of the share capital of Bank of China Limited, which owns the entire issued share capital of Bank of China Group Investment Limited. Bank of China Group Investment Limited owns the entire issued capital of Goldway Financial Corp, which owns the entire issued share capital of Charter Globe Limited, which in turn owns 206,611,560 Common Shares. Accordingly, Central Huijin Investment Ltd is deemed to be interested in 206,611,560 Common Shares held by Charter Globe Limited.

(4) The proposed private placement to Mr. Junhua Huang of 36,912,000 Common Shares has not been completed. Please refer to the announcement dated November 9, 2015 for further details.

ABOUT SUNSHINE OILSANDS LTD.

The Corporation is a Calgary based public corporation listed on the Hong Kong Stock Exchange since March 1, 2012. The Corporation is focused on the development of its significant holdings of oil sands leases in the Athabasca oil sands region. The Corporation owns interests in approximately one million acres of oil sands and petroleum and natural gas leases in the Athabasca region. The Corporation is currently focused on executing milestone undertakings in the West Ells project area. West Ells has an initial production target rate of 5,000 barrels per day.

By Order of the Board of Sunshine Oilsands Ltd.

Sun Kwok Ping, Executive Chairman

FORWARD-LOOKING INFORMATION

This announcement contains forward-looking information relating to, among other things, (a) the closing of, and the anticipated timing of the closing of, the Placement, the proposed private placement to Mr. Junhua Huang as disclosed in the announcement dated November 10, 2015 and the remainder of the Employee and Connected Subscription; (b) the future financial performance and objectives of Sunshine; and (c) the plans and expectations of the Corporation. Such forward-looking information is subject to various risks, uncertainties and other factors. All statements other than statements and information of historical fact are forward-looking statements. The use of words such as “estimate”, “forecast”, “expect”, “project”, “plan”, “target”, “vision”, “goal”, “outlook”, “may”, “will”, “should”, “believe”, “intend”, “anticipate”, “potential”, and similar expressions are intended to identify forward-looking statements. Forward-looking statements are based on Sunshine’s experience, current beliefs, assumptions, information and perception of historical trends available to Sunshine, and are subject to a variety of risks and uncertainties including, but not limited to those associated with resource definition and expected reserves and contingent and prospective resources estimates, unanticipated costs and expenses, regulatory approval, fluctuating oil and gas prices, expected future production, the ability to access sufficient capital to finance future development and credit risks, changes in Alberta’s regulatory framework, including changes to regulatory approval process and land-use designations, royalty, tax, environmental, greenhouse gas, carbon and other laws or regulations and the impact thereof and the costs associated with compliance. Although Sunshine believes that the expectations represented by such forward-looking statements are reasonable, there can be no assurance that such expectations will prove to be correct. Readers are cautioned that the assumptions and factors discussed in this announcement are not exhaustive and readers are not to place undue reliance on forward-looking statements as the Corporation’s actual results may differ materially from those expressed or implied. Sunshine disclaims any intention or obligation to update or revise any forward-looking statements as a result of new information, future events or otherwise, subsequent to the date of this announcement, except as required under applicable securities legislation. The forward-looking statements speak only as of the date of this announcement and are expressly qualified by these cautionary statements. Readers are cautioned that the foregoing lists are not exhaustive and are made as at the date hereof. For a full discussion of the Corporation’s material risk factors, see the Corporation’s annual information form for the year ended December 31, 2014 and risk factors described in other documents we file from time to time with securities regulatory authorities, all of which are available on the Hong Kong Stock Exchange at www.hkexnews.hk, on the SEDAR website at www.sedar.com or on the Corporation’s website at www.sunshineoilsands.com.

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.

This announcement appears for information purpose only and does not constitute an invitation or offer to acquire, purchase or subscribe for securities of Sunshine Oilsands Ltd.